Coastal delegation makes mark in Austin





“Mission accomplished,” is how Port Aransas Mayor Pro Tem Keith McMullin described the impact made by a coastal delegation that showed up at the state capitol on Tuesday, May 5.

The delegation went to Austin to protest

test windstorm insurance legislation with

potentially devastating consequences for coastal residents and businesses.

It’s still not time for coastal residents to breathe easy, but their message was heard.

McMullin said he and a group of about eight people met with Speaker of the House Joe Straus, who said he’d had conversations with Lt. Gov. David Dewhurst and Gov. Rick Perry, and that they are aware that the coast is concerned and united when it comes to windstorm insurance.

Another small group that included Port Aransas Mayor Claude Brown met with Perry Tuesday afternoon, McMullin said.

Legislation under consideration “is still onerous, but the consensus is that they’re still asking the coast to bear the burden for the entire state,” McMullin said.

Legislators got the message from the coastal delegation that “the coast plays an important role in the Texas economy and this (legislation) unfairly penalizes us for being on the coast,” McMullin said.

According to McMullin, State Rep. Todd Hunter’s position is that “no bill is better than a bad bill.”

Should coastal legislators succeed in keeping a bill in committee and off the House floor, other options for replenishing the Texas Windstorm Insurance pool include pulling money from other funds, McMullin said.

As Senate Bill 14, which was approved by the Senate last week, stands, “It’s still a 33 percent increase in three years (11 percent per year), and you hope no storm hits. If a storm hits, that number goes away,” McMullin said.

SB 14 is now waiting to be referred to committee in the House. Initially that was expected to be next Tuesday, May 12, but McMullin said that it is more likely it will be heard by the committee the following Tuesday, May 19.

Hurricanes Ike (2008), Katrina and Rita (2005) depleted funds in the Texas Catastrophic Windstorm Insurance pool, the insuror of last resort for coastal properties. Finding a means of replenishing those funds is the challenge faced by the Legislature.

House Bill 4733, introduced by Rep. John Smithee, R-Amarillo, was considered punitive for coastal residents who, if the bill was approved, would bear the entire cost of restoring funds to the windstorm pool.

SB 14, introduced by Sen. Troy Fraser, R-Horseshoe Bay, was the Senate response to HB 4733.

Lee Otis “Otie” Zapp Jr., of the Coastal Windstorm Insurance Coalition, said the changes negotiated in SB 14 last week “make the short term seem acceptable. Unfortunately, the bill still contains sophisticated provisions, which could result in a dire future.”

While surcharges for owners of vacation homes were eliminated from the original bill, Zapp said policyholder input was removed because the new board would be dominated by four insurers and two unaffected “out of catastrophe area” directors who would control “the windstorm insurance lives of several million Texans.”

According to the Texas Department of Insurance, in answer to questions

Hunter, R-Corpus Christi, policyholders would see an increase of about 11 percent per year for three years. That increase could be higher if TWIA experienced moderate to severe losses over the next couple of years.

In response to a question from Hunter, Jim Oliver, general manager of TWIA, said, “Policyholders would not see any changes in their premiums as a result of funding unless losses occurred above $400 million that is assessed to TWIA member insurers. Since the bonds that support the funding are for 10 years, the one potential problem several years in the future would be that TWIA could compound surcharges over several years if there were several years where there were bad storms in succession.”

McMullin said that while coastal residents gathering in Austin on Tuesday was beneficial, “I don’t think it will suffice.”

“Having civic leaders and elected officials from various coastal communities packing the committee room and testifying will be key,” McMullin said.

“We need to be there ‘front and center’ for that one,” McMullin said.


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